Moreover, the US Trade Representative report asserts, China has happily played the game on its own, and has violated current global rules to achieve its goals. Indeed, many Westerners warn that China is planning to use its technology-based power to impose an entirely new set of rules that is inconsistent with those long enforced by the West.

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Contrary to popular belief, these policies do little more than help lower the entry cost for firms and enhance competition. In fact, such policies encourage excessive entry, and the resulting competition and lack of protection for existing firms have been constantly criticised in China. Therefore, if China relies on effective industrial policies, they would not create much unfairness in terms of global rules.

Having said that, what are China’s actual technological prospects? The Chinese are certainly fast learners. Over the last 30 years, Chinese manufacturers have proved adept at seizing opportunities to emulate, adapt and diffuse new technologies.

But technological advances in the Chinese business sector occur at the bottom of the smile curve, and core-technology owners have extracted most of the added value from Chinese manufacturing. For example, in Danyang, a county of Jiangsu province that is a production hub of optical lenses for global markets, manufacturers can produce the most sophisticated models. Yet they lack the core software to produce, say, progressive lenses, so they must pay a fixed royalty to a US company for each progressive lens they make.

Likewise, China’s automobile manufacturers still import their assembly lines from developed countries.

Clearly, there is a big difference between applying digital technologies to consumer-oriented business models and becoming a world leader in developing and producing hard technology. The latter goal will demand sustained investment of time, human capital and financial resources in sectors with long basic research and development cycles (such as pharmaceuticals).

Given this, China probably remains 15 to 20 years away from matching the R&D input of, say, Japan or South Korea, and when it comes to output – the more important factor – it is much further behind. While China can accelerate progress by attracting creative talent and strengthening incentives for long-term research, there are no real short cuts when it comes to achieving the gradual shift from learning to innovating.

Here, universities have a pivotal role to play, not only by training new scientific and technological talent, but also by conducting basic research. This means moving beyond the focus on increasing the sheer number of students and placing greater emphasis on quality of education.

None of this can happen overnight. Indeed, as China learned from the failure of the Great Leap Forward in the 1950s, a genuine economic transformation cannot – and therefore should not – be rushed.

Zhang Jun is dean of the School of Economics at Fudan University and director of the China Centre for Economic Studies, a Shanghai-based think tank. Copyright: Project Syndicate